Which of the following is the correct CAPM equation used to determine the expected returns (r) of financial assets? (RM is the mean return of the market portfolio,rf is the risk-free rate,and is the beta computed against the return of the market portfolio.)
A) r = (RM - rf) - rf
B) r = rf - (RM - rf)
C) r = rf - (RM + rf)
D) r = rf + (RM - rf)
Correct Answer:
Verified
Q1: The beta of a risk-free asset:
A)is equal
Q2: Which of the following represents the
Q4: Which of the following can be considered
Q5: Which of the following is a reason
Q6: Which of the following is a disadvantage
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Q8: Momentum is defined as:
A)the number of securities
Q9: Which of the following is an assumption
Q10: To identify the tangency portfolio:
A)we must find
Q11: A portfolio consists of three stocks with
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